August 15, 2011

All He Is Saying Is, Give War A Chance

It's very hard to get inflation in a depressed economy. But if you had a program of government spending plus an expansionary policy by the Fed, you could get that. So, if you think about using all of these things together, you could accomplish, you know, a great deal.

If we discovered that, you know, space aliens were planning to attack and we needed a massive buildup to counter the space alien threat and really inflation and budget deficits took secondary place to that, this slump would be over in 18 months.

So the economy would recover if the government hired a bunch of us to rush around with colanders on our heads staring at the sky? Well, that surely extends the list of things I am glad Sarah Palin didn't say. And Obama has tuned this guy out? Go figure.

As to the notion that prominent libs now view Cheney's misplaced emphasis on WMDs in Iraq as a failed jobs program, well, color me surprised. "Bush Lied, Not Enough Were Hired" - geez, that doesn't even rhyme.

Finally, if Paul Krugman read the NY Times he would not make "Give War A Chance" pronouncements such as this:

Think about World War II, right? That was actually negative social product spending, and yet it brought us out [of the Great Depression].

AFTER the grim economic developments of the last few weeks, it’s easy to lose hope. Could the Great Recession of 2008 drag on for years, just as the Great Depression did in the 1930s? Adding to the despair is the oft-repeated notion that it took World War II to end the economic nightmare of the ’30s: If a global war was needed to return the economy to full employment then, what is going to save us today?

Look more closely at history and you’ll see that the truth is much more complicated — and less gloomy. While the war helped the recovery from the Depression, the economy was improving long before military spending increased.

Why is Krugman a tool of the defense industry, recycling these pro-war myths? Baffling. [More on these myths by way of Karl at PP.]

DARE WE TACKLE THS SUBSTANCE? Krugman and Zakaria are advocating for valueless make-work programs as a stimulus tool, drawing this comment from the invaluable Noel Sheppard:

On the other hand, isn't it fascinating that a man that is always opposed to tax cuts - which is government allowing people to keep more of THEIR money - and doesn't think that stimulates the economy believes it would be economically stimulative to give people someone else's money to do absolutely nothing?

Well, when pressed Krugman will admit that a payroll tax cut (which puts money in lower-income pockets) is about as likely to be spent and is therefore roughly as stimulative as extended unemployment insurance. In fact, back in the run-up to Obama's inauguration Krugman described payroll tax cuts as a "pretty good" stimulus tool. Well, briefly - a few days later they were "ineffective"; presumably that reflected a shift in the political winds.

My impression of the general economic consensus is that hiring people to dig and re-fill holes, or monitor for space aliens, does not provide any more stimulus than any other cash transfer to a person likely to spend it. Handing out money on street corners, the Bernanke helicopter drop, and payroll tax cuts should all be in play, subject to caveats about the marginal propensities to consume of the various beneficiaries.

If a proposed stimulative shovel-ready project adds social value (e.g., a useful bridge, or a useful bridge repair), then borrow the money, hire some people, and start digging; if the project adds nothing, it won't be more stimulative than a cash transfer to someone with a similar marginal propensity to consume. Krugman's belief in the power of make-work and his preference for that over tax cuts, is motivated by something other than standard economic textbook theory.

LAST GASP: There is a widespread economic consensus that temporary tax cuts (e.g., cash for clunkers) don't produce permanent changes in spening or investment. So why, one might ask, would a temporary uptick in government transfer payments by way of wacky make-work projects produce a permanent change in spending or investment?

Beats me. War advocates such as Krugman could respond that WWII didn't look like a temporary blip when it started. However, Krugman is now advocating an eighteen month War on Space; maybe his real plan is to declare a seemingly open-ended war on space with the hope that it can be wound down in eighteen months. Personally, I would like to know abit more about the likely timeframe since a colander-cap is not a good look for me.

KRUGMAN GETS RESULTS! We bend space-time to find these stalwart citizens answering Krugman's call and creating jobs! (Or is that the invasion force?)

“Morgenthau believed in balanced budgets, stable currency, reduction of the national debt, and the need for more private investment. The Wagner Act regarding labor unions met Morgenthau’s requirement because it strengthened the party’s political base and involved no new spending. Morgenthau accepted Roosevelt’s double budget as legitimate — that is, a balanced regular budget, and an “emergency” budget for agencies, like the Works Progress Administration (WPA), Public Works Administration (PWA) and Civilian Conservation Corps (CCC), that would be temporary until full recovery was at hand. He fought against the veterans’ bonus until Congress finally overrode Roosevelt’s veto and gave out $2.2 billion in 1936. In the 1937 "Depression within the Depression," Morgenthau was unable to persuade Roosevelt to desist from continued deficit spending. Roosevelt continued to push for more spending, and Morganthau promoted a balanced budget. On November 10, 1937, Morgenthau gave a speech to the Academy of Political Science at New York's Hotel Astor, in which he noted that the Depression had required deficit spending, but that the government needed to cut spending to revive the economy. In his speech, he said:[5]

"We want to see private business expand. … We believe that one of the most important ways of achieving these ends at this time is to continue progress toward a balance of the federal budget."

His biggest success was the new Social Security program; he reversed the proposals to fund it from general revenue and insisted it be funded by new taxes on employees. Morgenthau insisted on excluding farm workers and domestic servants from Social Security because workers outside industry would not be paying their way.[6] He questioned the value of the deficit spending that had not reduced unemployment and only added debt:[7]

"We have tried spending money. We are spending more than we have ever spent before and it does not work. And I have just one interest, and if I am wrong … somebody else can have my job. I want to see this country prosperous. I want to see people get a job. I want to see people get enough to eat. We have never made good on our promises. … I say after eight years of this Administration we have just as much unemployment as when we started. … And an enormous debt to boot."[8]

Oh well, I guess we are better off waiting for Space Invaders. At least that would start a new round of “Natural Born” questions.

Clearly the US was recoverying before the Germans bombed Pearl Harbor. By exporting war material to the Allies starting in 1938 it had become the Merchant of Death. It was not deficit spending that did it, it was spending the UK & France that primed pump.

Over at W.M.Briggs blog he asked his commenters for predictions for 2011. Mine were fairly tame: Part two of the double dip would be a doozy and the lizards beings who rule us all would finally be unmasked.

Now this idiot Krugman tells me that in order to avoid the former, we must welcome the latter.

Looks to me like the Depression was just impossible to measure during the war -- and what really was required to end it was the death of Franklin D. "President For Life" Roosevelt. Once Truman was president the Depression was over...

If we're going to spend money, might as well spend it on military items. That way, we have them if we need them, and if we have them if we need them various buttheads may decide not to bother.
So it will look like we didn't need them.
But defense plants are a lot more shovel-ready than the bulk of the stuff the stimplan didn't actually start.

Obama's talking. He's happy to be out of Washington.
Also pointing out that unlike Bush who caused all the problems in the world when he was president, Obama has all these world problems being thrown in his way.

"Hundreds are gathered" to hear Obama per local KCCV tv. Who got tickets?.."On Sunday, people started lining up for tickets around 2 a.m. It took only an hour to run out of the free tickets when organizers started handing them out Sunday afternoon."

Politico is all over Obama's new "modest ride". It's a bus, it's so black it doesn't appear to have windows, and there's no writing on it at all. No mention of its cost. Thank goodness, our media watchdogs never sleep.

Mr Buffet has said repeatedly that he would be perfectly willing to contribute more of his fortune to the federal government, provided only that it consents to threaten him with imprisonment for the rest of his life if he refuses.

From the little dab that was on CNBC of Zero's end of the speech, the video shot is pretty 'tight' in that not much of the size of the attendees shows in the frame.
This a typical way of making the crowd look bigger than it is.
The talking heads sounded underwhelmed in their reporting of the event.

Perhaps Krugman is a space alien. He overlooks that if we were successful in our defense, we would get relief from the space alien threat but there is no reason to have that kind of build up without the space alien threat. Being safe from space aliens would be great with or without inflation.

Is he suggesting we manufacture a threat and then spend money on it (gee, break a window and then repair it-- oh that's it, the London riots were simply a Krugman stimulus program!).

What we can hope for is that the space aliens destroy other countries and then we can make money building them back up. One of our demands in the armistice is that they take Krugman back with them.

I am ignorant of this and wish some of those commentators with illustrious intelligence and learning to please educate me since I have stupidly missed some important connection.

I do remember that Bush/Co, both before that presidency and during it was a favorite cause to be supported by Enron and that as a return of favor Enron was given the chance to help chose many of those patriotic Americans whose job was to regulate it's trades.

Some of us who lived in California at that time still remember. My GOP brother-in-law was going ballistic at the time because he lived in San Diego, an area where the cost of energy suddenly shot up, Of corse he blamed the Davis administration being the good GOP foot soldier.

Eventually we even elected a "governator", but sadly even he could not influence my brother-in to embrace the realities of that situation. For once the "ratings" agencies solved the problem for us and I detect by the tone of the article that that was a good thing after all since it shut down a criminally run operation.

Rumor has it that Bush/Co was a sadder place to work at after that. They went into morning and attempted to forget that their good friend had ever existed due to the shock of that loss.

In the area Pasadena where the municipality owned the power utility, we did not even notice scam in our bills. The People of Pasadena were protected, praise be to God.

Again I am only visiting to request an education concerning Krugman's involvement with Enron, any info, or lack of it will be greatly appreciated.

In 1999 Krugman was part of an Enron Corporation board that paid him $50,000. In 1999, as journalist Andrew Sullivan has reported, Krugman wrote an article praising Enron's free-wheeling entrepreneurial structure. (Enron would later collapse amid scandal and charges of financial wrongdoing. Thereafter distancing himself from the disgraced company, Krugman in a 2001 column would describe the aforementioned board as "an advisory panel that had no function that I was aware of.")

Very, very lame response to Krugman. The best you can do is cite "Karl" at Patterico and Amity Shlaes? Try viewing the entire segment - here. It's actually a pretty interesting discussion. Although perhaps not if you're humor challenged.

Krugman's relationship with Enron was the classic credentialed moron scam. Krugman sold his name to Enron for $50 K a year. In return, Enron got to put Krugman's name on all its company sales pitch stuff as an economic advisor to the company. Krugman's actual participation with the company was a once every 3 month expense paid weekend with a bunch of other credentialed morons that was called something like a "strategic ecnomic advisors board meeting." Not quite as demanding as being a Fannie/Freddie board member like Rahm, but those higher paying gigs went to former Dem politicla operatives, which is one step higher up on the credentialed moron scale.

Oh, and I just want to be absolutely clear on the argument being made by Krugman. Borrowing $1 Trillion to fight a real war does serious harm to the economy, but borrowing $2-3 trillion to prepare for a pretend war against space aliens would be great for the economy right now. The obvious answer is to spend $2-3 trillion on a real war right now!

Rush Limbaugh calls Krugman "ferret-like," and I won't quibble with that, but Krugman will always have his defenders. Why? Because his heart is in the right place.

Cutting taxes (otherwise known as "increased spending in the tax code") is bad, because it means less money confiscated from people who earn it in productive endeavors; but government spending - even on wasteful do-nothing fantasies - is good. Simple, and possibly even brilliant. $20K per hour is a bargain for this genius.

Ace, before he became all verklempt in his next fur regrafting post , made the Krugman comparison to Adrian Veldt, the mastermind
in Watchmen, who engineers a phony alien
invasion to avert WW 3, that was one movie
I really wanted to walk out of btw.

Oh dear God narc; it looks like the Ewok, AllahBeta and Poppin' were wined and dined by TOP MEN and given an advance peek at the Iowa crop report. I almost get as big a charge out of the way Sarah screws with those idiots' noggins as what she does to El JEFe's. I think ace is batting a perfect .000 on all things Palin.

Yanno, I've read a number SF books based on the premise (fairly understandable) that an invasion by aliens of earth would instantly unite earth. (The Arab saying "Me and my brother against my cousin; me, my brother, and my cousin against the other" is fairly universal, even if the rest of us don't have a saying). We all still have tribal leanings, even if sports teams have displaced clans in most of the west...